Net rises 9.84% to Rs 2,932.71 crore despite revenues falling 28% to Rs 10,705.75 crore
Diversified conglomerate ITC came out with a mixed bag of earnings, posting a 9.84% rise in its standalone net profit at Rs 2,932.71 crore during the quarter ended March 2018, beating most analyst estimates.
Analysts on average expected a net profit of Rs 2,845 crore, according to Thomson Reuters data.
However, aggregate gross revenues from sale of products and services fell sharply by 28% from Rs 14,882.75 crore to Rs 10,705.75 crore in a period which, the company said, saw a steep increase in tax incidence on cigarettes, subdued demand conditions in the fast-moving consumer goods (FMCG) industry and lack of trading opportunities in the agri-business.
The rise in operating profit, as indicated by earnings before interest, depreciation and taxes, has gone up 7% to Rs 4,144 crore, with a corresponding rise in margins to 39.1% from 34.8% on the back of a 38% drop in expenses to Rs 6,996.46 crore from Rs 11,363.78 crore.
ITC undertook cost management initiatives across its business verticals, it said.
During the day, the Kolkata-headquartered company elevated chief executive officer and director Sanjiv Puri to the post of managing director, which was vacant following the retirement of Y C Deveshwar from his executive role in February 2017.
ITC's pre-tax profits from cigarettes rose 7.57% to Rs 3,505.76 crore from Rs 3,258.76 crore a year ago despite cigarette sales dropping 4.3% as per a post-earnings note by brokerage firm Motilal Oswal.
Profit from other FMCG business consisting snacks and other brands went up 64.16% from Rs 55.56 crore to Rs 91.21 crore.
"FMCG revenue growth stood at 10% during the quarter on a relatively firm base driven by Bingo! snacks, Sunfeast biscuits, B Natural juices, Engage deos, Fiama and Vivel personal wash, Savlon handwash and Classmate notebooks," ITC said in a statement.
Profits from its hotel business grew 12.76% from Rs 66.936 crore to Rs 75.47 crore during the quarter on 5% growth in revenues to Rs 408 crore.
"While growth in segment revenue during the year was subdued at 5.6% reflecting overhang of excess room inventory and the impact of highway liquor ban, performance during the second half was significantly better driven by increase in average room rates and robust growth in food and beverage revenue," the company said.
Agri-business profits dropped from Rs 134.92 crore to Rs 123.97 crore on the back of limited trading opportunities in agri-commodities such as wheat, soya, coffee and lower leaf exports during the quarter and also because of a higher base-effect in the year-ago period when the company engaged in imported wheat trading.
Paper business did marginally better with profits going up from Rs 240.17 crore to Rs 242.42 crore as input costs remain benign, higher substitution of imported pulp with in-house production and continued focus on product mix.
SAY BINGO!
- Expenses fell 38% to Rs 6,996.46 crore from Rs 11,363.78 crore in the year-ago period
- The firm elevated CEO and director Sanjiv Puri to the post of managing director
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
 "Sanjiv Puri")
)
The rise in operating profit, as indicated by earnings before interest, depreciation and taxes, has gone up 7% to Rs 4,144 crore, with a corresponding rise in margins to 39.1% from 34.8% on the back of a 38% drop in expenses to Rs 6,996.46 crore from Rs 11,363.78 crore.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}